Demographic ageing, labour-employment prospects and migration in the EU with an emphasis on the Southern European countries

Christos Bagavos, Panteion University, Greece
Alexandra Tragaki, Harokopion University of Athens

This paper examines the potential volume of both labour force and employed population, seen from the supply point of view. The first stage of our analysis is focused on the evaluation of the size and variations of a theoretical “maximum” employment, for each of the selected countries. At a second stage, having set different objectives/assumptions about future annual employment growth, we estimate various scenarios about future employment levels. For each of the concerned countries, we attempt to evaluate a critical year/period beyond which labour-employment reserves will not allow any further increase in employment level. Analysis is based on the 2004 Eurostat’s population projections, using two different scenarios: the “baseline” and the “zero migration” scenario. This permits the investigation of the role of international migration on the evolution of working-age population size and structure. Our findings indicate that disparities across EU are rather pronounced. Future potential employment varies across countries, because of diverse working-age population trends and various employment rates by age and sex. In a declining working-age population context, an increase in the employment rates could prevent or at least moderate labour force shrinkage. This may be theoretically feasible for countries with low employment rates but not for those where employment rates have already reached levels difficult to increase any further. In an ageing context, future employment growth will be more closely connected to the increase in employment rates by age and sex as well as to migration trends than it has been in the past. Future activation of labour and employment reserves will claim for policy adjustments regarding the link between education and labour market, the reconciliation between work and family, the further implementation of active ageing and the promotion of socio-economic integration of migrants in the host countries.